Bill H.294
188th (2013 - 2014)

An Act regulating the direct shipment of wine

Bill Title: An Act regulating the direct shipment of wine

By Mr. Speliotis of Danvers, a petition (accompanied by bill, House, No. 294) of Theodore C. Speliotis and Daniel A. Wolf for legislation to authorize the direct shipment of wines. Consumer Protection and Professional Licensure.

SECTION 1. Chapter 138 of the General Laws, as so appearing, is hereby amended by striking section 19F and inserting in place thereof the following section:-

Section 19F. Notwithstanding any general or special law to the contrary,

(a) Any person, firm or corporation that holds a federal basic permit pursuant to the federal Alcohol Administration Act, compiled in 27 U.S.C. § 201 et seq., holds a license in the Commonwealth or any other state to manufacture and export wine, and is in the business of manufacturing, bottling or rectifying wine may apply to the commission for a direct shipper's license under this section.

(b) A direct shipper, meeting the requirements of this section, shall be authorized to make sales and delivery of wine, as defined in §1, by common carrier, which holds a valid transportation permit issued by the commission under §22, to the citizens of this state over the age of twenty-one (21), for personal use and not resale, who have purchased the wine directly from the direct shipper, subject to the limitations and requirements imposed by this section.

(c) The annual license fee for a license issued under this section shall be $100.00 per winery; provided that an affiliate, franchise, or subsidiary thereof which holds a separate Federal Basic Permit shall require a separate license. The applicant shall provide the commission and the department of revenue with a true copy of the applicable alcoholic beverage license to manufacture, export and sell its wine as issued by the appropriate licensing authority. A copy of the wine shipment license obtained under this section shall be sent by the commission to the department of revenue to be kept on file.

(d) A person licensed under this section shall ship wine in accordance with section 22.

(e) A licensee, licensed under this section, may ship not more than 24 cases (no more than 9 liters each case) per year of wine to a resident located within the Commonwealth.

(f) A person licensed under this section shall: (i) report yearly to the commission and the department of revenue the total number of gallons of wine shipped into the commonwealth for the preceding year; (ii) pay to the department of revenue, under the department's rules and regulations, all taxes due, the amount of such taxes to be calculated as if the sale were at the location where the delivery is made; provided, however, that the licensee shall pay, for each shipment of wine, the excise levied on importations of wine calculated under section 21 and any and all other applicable taxes, including sales tax; and (iii) upon request, allow the commission or the department of revenue to perform an audit of the licensee's records.

(g) No person shall direct ship wine to consumers without a license to sell and ship wine. A person who manufactures, transports, imports, exports or receives wine in violation of this section shall be deemed to have engaged in a deceptive act or practice under chapter 93A and be subject to equitable relief under that chapter.

(h) The commission shall enforce the requirements of this section, by administrative proceedings, against a licensee who ships wine in violation of this section as follows: for a first violation, by a warning; for a second violation a three day temporary loss of license or a fine of no more than $100; for a third violation, a ten day temporary loss of license or a fine of not more than $500; for any other violations of this section within one calendar year, by a prohibiting the winery from making any direct shipment of wine under this section or by a fine of up to $1,000, or both; provided that after 1 year, the winery may reapply for the authority to directly ship wine under this section.

(i) If a violation of this section involves a sale or delivery to a person under 21 years of age, a first offense shall be punished by a six day temporary loss of license or a fine of $200.00; for a second violation shall be punished by a twenty day temporary loss of license or a fine of $500; for a third violation within one calendar year, by a prohibition of the winery from making any direct shipment of wine under this section, by a fine of up to $1,000, or both; provided that after 1 year, the winery may reapply for the authority to directly ship wine under this section. Nothing in this clause shall preclude punishment under section 34.

(j) The commission may promulgate rules and regulations to effectuate the purposes of this law in accordance with its powers under chapter 138, Sec 24. The department of revenue may promulgate rules and regulations necessary to effectuate the tax oversight, collection and enforcement provisions of the General Laws as they relate to this section.

(k) The commission shall issue an annual report to the house and senate committees on ways and means and the joint committee on consumer protection and professional licensure, which shall include, but not limited to, a determination of direct shipment licenses issued, a review of violations and enforcement measures under this section, a summary of revenue raised under this section and an analysis of the need for changes in the law and regulations relative thereto.

SECTION 2. Said section 22 of said chapter 138, as so appearing, is hereby further amended by striking out the following phrase in the ninth paragraph:

“and with a seal of licensure attached thereto as provided by the commission”

SECTION 3 The provisions of this law are severable, and if any clause, sentence, paragraph of this section or an application thereof shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder thereof but shall be confined in its operation to the clause, sentence, paragraph, or section adjudged invalid.

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